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GBP CHF Maintains Support above 1.30

The Swiss Franc remains very strong due to its safe haven status amidst all the ongoing global economic and political uncertainty although it has come under new pressure and has moved away from the highest levels. Next week commences with Swiss employment data which is likely to be keenly monitored by the Swiss National Bank. On Thursday however Swiss Gross Domestic Product is more likely to have an impact on Swiss Franc exchange rates. Any improvement in the economic data is likely to lend support to an already strong Swiss Franc.

The Swiss National Bank did signal recently that is would not hesitate to intervene in the currency markets if it felt it was required. Clients with pending requirements either buying or selling Swiss Francs should remain on notice that there could be an intervention from the central bank. History has shown us that when the Swiss National Bank steps in there is major market volatility as was seen when the peg for EUR CHF was introduced some years ago.

GBP CHF is likely to be driven forward following the meeting between UK Prime Minister Theresa May and European Council President Donald Tusk where the offer of a divorce settlement has reportedly been increased although no figure actually given. There is an expectation that a figure of up to €40 billion may be offered. in the coming weeks. This Brexit deadlock is in my opinion where new direction for GBP CHF rates should come from. If the door to a future trade agreement opens then the pound should in theory see a major boost. The risk however is that if the stalemate cannot be broken and talk do not move forward to the next stage then the pound should in theory fall.

For more information on the Swiss Franc and what is driving the rates then please feel free to get in touch with me at jll@currencies.co.uk